First things first: the reference that mainstream econ theory uses is the Walrasian general equilibrium. This is a world where a set of agents trade different goods in different markets and all markets clear by assumption. 2/n
Aug 18, 2022 • 21 tweets • 5 min read
Let met talk about an issue I have with supply-side analyses of fossil fuel shocks using input-output frameworks, a la Bachmann and many others. 1/n (n=21)
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(I've been wanting to write about this since last winter and I finally have some time to do so)
I'm gonna take the example of a recent IMF paper, but this applies equally to many others. The IMF paper has the advantage of being well written and crystal-clear about what they are exactly doing. 2/n
The ONS has released today a bunch of labor market statistics for June, including unemployment (at 3.8%) and wage growth (at 4.7% y-o-y for the 3-month average).
Is wage growth too high given the unemployment rate? It depends.
1/n (n=7)
The chart shows the unemployment rate (code MSGX) and the growth rate of average weekly earnings for regular pay (code KAI7) at yearly frequency.
The point labeled "2022" corresponds to the last reading for June (with wage growth in y-o-y).
This is a basic Phillips curve. 2/n
Oct 28, 2019 • 18 tweets • 7 min read
1. Why is core inflation so low in the #Euro area despite a strong recovery and dynamic wages?
1/ Interesting post by @Undercoverhist on large macro models of the 60ies echoing recent comments by @sjwrenlewis@VMRConstancio@ojblanchard1. Even though it is not well known in the academia, these so-called "semi-structural" old-fashioned models are still widely used in...
2/ ... policy institutions, and practitioners are happy with them (to be fair, they are much smaller than their counterparts from the 60ies). They are used for both medium term forecasting and scenario analysis. They have several advantages over other models for these tasks.
